M&A, dry powder and growth: A year of global real estate AUM

The volume of global real estate assets under management has tripled since 2009 to reach €3.3tn (£2.8tn) in 2020, according to the latest Fund Manager Survey from ANREV, INREV and NCREIF. Global real estate AUM totalled €900bn in 2009 but has ballooned over the past decade. The trio says the increase highlights the strength of the sector as an investment class. Their survey reveals that despite a year of hardship, the sector remains in demand with some €195bn of dry powder or 9.3% of total global AUM targeting real estate. The vast majority, some 37%, of global real estate assets are held by just 10 fund managers, with Blackstone Group leading the pack with €260.5bn of AUM and Brookfield Asset Management in second with €172.4bn. Prologis is at number three, with an AUM of €121bn, moving up from sixth place in 2019 as a result of strong value growth in the logistics and industrial sector. PGIM Real Estate takes fourth place with €118.8bn and Nuveen is fifth with €108.4bn of AUM. Consolidation in the sector continues at pace. Around 20% of respondents to the survey said they were involved in merger activity in both 2019 and 2020. Managers in the Asia Pacific region accounted for the largest share of mergers in 2020 at 25%, versus 18% for their counterparts in Europe and 17% in North America. For 2021, some 7-8% of respondents globally said they were planning M&A activity. The survey also reveals that non-listed real estate vehicles accounted for 83.1% of the total global AUM, with the proportion of total global AUM attributed to non-listed real estate debt products rising from 7.6% in 2019 to 9.4% in 2020. This rise was even more marked in Europe, climbing to 8.1% from 3.6% the year before. The increases show the growing importance of debt products to investors. INREV chief executive Lonneke Löwik said: “The evolution of the global growth in fund managers’ AUM speaks to a continuing robust appetite for the asset class. This is particularly encouraging given the challenges of 2020 in light of the global health pandemic. “The details also reveal some interesting signposts for the future, healthy levels of dry powder that indicate the capacity to execute deals, as well as strong demand for non-listed real estate funds and considerable emphasis on the European debt products. All of the above provide a broad level of comfort for the year ahead, and especially as many global economies are also starting to recover.” To send feedback, e-mail samantha.mcclary@eg.co.uk or tweet @samanthamcclary or @EGPropertyNews